UPDATE: CBS Calls Time Warner Cable’s A La Carte Proposal A “Sham”

UPDATE: Now Time Warner Cable has a response to CBS’ response to TWC’s proposal to offer CBS stations on an a la carte basis: It says ithe effort to revive negotiations was “sincere.” It adds: “We’re disappointed in their lack of responsiveness, particularly to our request for them to quit unfairly blocking the free content available on CBS.com from our Internet customers. We hope they will return to the table to negotiate in good faith on behalf of our customers and their viewers.”

PREVIOUS, 2:32 PM: A more formal response will come later, but here’s CBS’ initial answer to Time Warner Cable’s proposal to offer its O&O stations on an a la carte basis: “Today’s so-called proposal is a sham, a public relations vehicle designed to distract from the fact that Time Warner Cable is not negotiating in good faith. Anyone familiar with the entertainment business knows that the economics and structure of the cable industry doesn’t work that way and isn’t likely to for quite some time. In short, this was an empty gesture from a company that is expert at them.”

PREVIOUS, 12:07 PM: CBS says that it “received Mr. Britt’s ‘offer’ simultaneous with its release to the media. We are formulating our response.”

PREVIOUS, 11:04 AM: Time Warner Cable can offer CBS “on terms of its choosing, with 100% of that price remitted to CBS,” CEO Glenn Britt says in a letter today to CBS chief Les Moonves — the latest effort to resolve the contract impasse that since Friday has left millions of TWC customers unable to watch programming from CBS and Showtime. “This way, rather than our debating the point, we would allow customers to decide for themselves how much value they ascribe to CBS programming.” Since the proposal “is very straight forward, the papers can be completed quickly.” TWC released its news moments before COO Rob Marcus appeared on CNBC for a scheduled interview. He said that a la carte is “the purest way to find out what customers want to pay” for programming. “It takes us out of the middle of it.” Britt also says that TWC would agree to resume carriage of CBS stations and channels “with the new economics TWC reluctantly agreed to during our negotiations, while employing all the other terms and conditions of our recently expired contracts.” In addition to the carriage proposals, Britt asked Moonves to stop blocking TWC’s Internet customers from watching full episodes of programs on CBS.com. “Regardless of the other issues between us, it is surely beyond the pale for you to subject these Internet customers to blocking of content that is made available for free to all others.” Here’s Britt’s letter to Moonves:

Dear Les, In the interests of getting CBS back on our cable systems today, we write to propose that CBS and Time Warner Cable immediately agree to resume carriage with the new economics TWC reluctantly agreed to during our negotiations, while employing all the other terms and conditions of our recently expired contracts. Although those terms are not ideal to CBS or TWC, and would leave TWC and our customers without the digital rights that CBS has provided to others, since both parties have lived under those terms productively for many years, we believe we should continue to live with them in the interest of restoring CBS immediately for the benefit of consumers. Alternatively, if you are unwilling to agree to this proposal, we would also be willing to resume carriage by allowing CBS to make its stations available on an a la carte basis at a price and on terms of its choosing, with 100% of that price remitted to CBS. This way, rather than our debating the point, we would allow customers to decide for themselves how much value they ascribe to CBS programming. In connection with both of these proposals, we would expect you to allow us to immediately resume carriage of your CBS stations (and other CBS-programming services) on retroactive terms as we work out any necessary details. The extension would be ongoing to make sure consumers are not once again held hostage by CBS during this process. We expect, though, that since each of our proposals is very straight forward, the papers can be completed quickly. Finally, we call on CBS regardless of whether it accepts or rejects our proposals, to immediately cease its blocking of CBS.com content from TWC’s high-speed Internet customers. Regardless of the other issues between us, it is surely beyond the pale for you to subject these Internet customers to blocking of content that is made available for free to all others. This is especially so given that CBS uses free public airwaves to broadcast that content and has public interest obligations that it is plainly flouting. In addition, this conduct is abhorrent in that CBS is using this blocking to punish TWC’s Internet customers across the country, including millions of consumers in cities where we continue to carry CBS on our cable systems through agreements with other CBS-affiliated stations; is blocking customers of other multichannel providers, including Direct TV, with whom CBS has no dispute; and is apparently blocking customers of certain other ISP’s, to which TWC provides wholesale Internet services. We stand ready to speak with you immediately to follow up on these matters.

70 Comments

Cable providers are the middle man of the broadcasting industry. TWC has GOT to learn their place. Or they will lose CBS/TWC negotiations.

Mister Sinister • on Aug 5, 2013 2:32 pm

No, see, you don’t get to go to Capitol Hill and say that ala carte pricing will destroy the cable industry, and then turn around the next day and tell CBS you’ll do ala carte but only for their channels. I already pay TWC an ala carte price for one of the two channels Time Warner has STOLEN from me this week: Showtime.

Frankly, if you’re going to allow ala carte in one way, then PLEASE allow me to exempt myself from the pointless $15 that you charge me every month in order to never watch ESPN or any of the other sports networks you’re shoving down my throat. That’s $180/year that TWC and ESPN and Fox Sports steal out of my pocket just so I can watch BBC America and HBO.

Et Tu Alacarte? • on Aug 5, 2013 2:32 pm

Not to mention all those channels IN ANOTHER LANGUAGE that I don’t want but have to pay for to get the channels I want. Seriously folks, I am thinking I can deal with over the air…

TWC customer who already pays too much! • on Aug 5, 2013 2:32 pm

Here, here! Sports channels, shopping channels, music channels, …

TWC is only “holding the line” because the money wouldn’t be going DIRECTLY into THEIR pockets! And CBS may be #1 today, but that can change any time! They BOTH need to get a grip!

Jimmy • on Aug 5, 2013 2:32 pm

Your point is what: cave to whatever demands CBS and other providers make no matter the cost to customers? That makes zero sense.

What TWC is offering is to actually be a middle man. Let CBS charge what they want and let the customer decided if a 600% increase(if that’s true) it worth it to have Big Brother, NCIS, Under the Dome, etc. — capitalism at its finest. For me, it wouldn’t be worth it.

ArchiesBoy • on Aug 5, 2013 2:32 pm

Los Moonves is terrified of the à la carte concept, because it would show — graphically, in dollar signs — just how valuable — or not valuable — CBS’ programming is to TWC’s viewers and by that, to viewers in general. If à la carte shows that TWC’s viewers couldn’t care less about CBS, Moonves’ leverage would go up in a puff of smoke. ¶ Eventually, the public will figure out how to make easy conversion to OTA, the cable TV business will collapse like a house of cards, and that will be that.

frankiemachine • on Aug 5, 2013 2:32 pm

we are the losers…especially those who watch dexter and ray donovan…great shows but will we lose any…i have no sympathy for either…

Chris • on Aug 5, 2013 2:32 pm

Nice…wonder how much people would pay for CBS?

Spud Hosnick • on Aug 5, 2013 2:32 pm

just about everybody; the most-watched network in ALL TWC homes.

Gr • on Aug 5, 2013 2:32 pm

LOL….the only people who watch CBS are over 50.

Karl in Burbank • on Aug 5, 2013 2:32 pm

No one is going to pay $4 a month for CBS and KCAL. LOL.

kuzzz • on Aug 5, 2013 2:32 pm

So what??? If they are over 50 it does not mean they are not people and don’t count. They are, and paying customers as well. And wait a little, some day you’ll be ove 50 too. And some jerk will tell you you don’t matter.

ArchiesBoy • on Aug 5, 2013 2:32 pm

You bet your ass, young pup!

Isa • on Aug 5, 2013 2:32 pm

there’s more of us than you young whipper-snappers! and we certainly have more money to spend than the vast unemployed under 25s…many of whom still live home with us over 50 folk!!!

rearview • on Aug 5, 2013 2:32 pm

Welcome to ten years ago. The world has past you by.

CBS hasn’t been the old folks network for ages.

Passed • on Aug 5, 2013 2:32 pm

Spelling class has “past” you by.

chris • on Aug 5, 2013 2:32 pm

I hate TWC but on this dispute I’m on their side. Moonves has gotten too cocky, he thinks he’s the king. Sorry, CBS isn’t worth it, they have a couple of shows worthwhile, they pay everybody astronomical salaries, which they aren’t worth (ie Ashton Kutcher)
Give it a few more days, nobody will miss them.

mewsical • on Aug 5, 2013 2:32 pm

I would miss Judge Judy and Dr, Phil and I also like the local station KCAL.

Quite the opposite. Anyone who wants CBS in order to watch football can just order it. What’s great, is that once football season is over a subscriber can cancel CBS all the same.

anonymous • on Aug 5, 2013 2:32 pm

I’m saying if CBS does not accept this deal – which they won’t.

Dil • on Aug 5, 2013 2:32 pm

Wow, CBS must really be terrible. They’ve caused me to actually side with TWC, for probably the first time in my life. At any rate, i tend to like anything that pushes towards an a la carte system, which this should be a good test for.

anonymous • on Aug 5, 2013 2:32 pm

TWC knows good and damn well CBS will never go for this. This is just a stunt on their part to place the blame on CBS instead of Time Warner.

Jimmy • on Aug 5, 2013 2:32 pm

Again, I don’t understand the blame TWC crowd. How is it their fault CBS is asking for more than TWC willing to pay? There has to be a point where someone says enough. This probably isn’t it because TWC will start getting pressure to cave.

richard • on Aug 5, 2013 2:32 pm

Corporate greed drives, runs and ruins America. It used to be that the bread + circus equation was put to maximum effect, but it seems that even know the circus is being played with with extremely greedy and petty hands. Be careful of what you do. I get a feeling both these companies have incurred in insulting, manipulating, deceiving and taking their customers for a bad, bad drive and , even though they don’t seem to realize, in these times of shaky an rapidly evolving business models floating in the digital hurricane. sooner or later they will pay a huge price for this episode, much bigger than the amount of cash they’re respectively trying to pocket by staging this farce. When you are a vampire, or a parasite, you have to be careful not to kill your prey. In this case, you have to be careful not to abuse your customer too much. These two companies, with they little war, have done so and probably think they’ll get away with it because that is an essential part of who they are and what they do. But things move fast, and consumers won’t forget this. And they will make them pay for it. “Les” and “Glenny”, watch out.

sladewilson • on Aug 5, 2013 2:32 pm

TWC actually proposed a pretty decent deal to CBS. It’s put up or shut up time, Les. I bet dollars to donuts he won’t go for it…

TV Gord • on Aug 5, 2013 2:32 pm

He knows damn well CBS isn’t going to go for that! Talk about disingenuous!

Bruce • on Aug 5, 2013 2:32 pm

This proposal does a great job reaffirming the roles of these companies as many ordinary viewers see them. CBS’s job is to provide advertising supported content at no charge to the viewer. TWC’s job is to deliver that content into viewer homes.

If CBS wants to change the balance and get paid for their ad-supported, public-supported (via spectrum) content, than let them take that directly to viewers for validation.

Should they prevail in that, I think there is a legitimate question as to whether they should continue to receive spectrum that perhaps can be put to a higher and better public use in the modern era. At least one network seems uninterested in using it for its intended purpose, to provide signal to as many people within the authorized zone as possible.

TV Addict • on Aug 5, 2013 2:32 pm

CBS posted higher than expected profits in their second quarter this season. Do you know where those profits come from? Advertisers and cable subscriptions. Don’t you think we pay enough as it is? My TWC bill is astronomical and I have no other choices because I can’t have a dish on my apartment building and there is no other cable company in my area to choose from. So no, I don’t want to pay more for the network or their affiliates. If football is that important to you, then pay for it. I don’t watch it and have no intentions of paying more. The blackout will allow me to watch other networks and their shows.

doubtful • on Aug 5, 2013 2:32 pm

If you don’t like football on CBS, Fox, NBC and ESPN, just wait until TWC’s new sports channels roll out with the billions they paid for LA Lakers and Dogers rights…..which they are rolling into a new channel that all TWC LA subscribers get to pay for whether they watch it or not.

missingshowtime • on Aug 5, 2013 2:32 pm

I could care less about CBS and wouldn’t pay a dime for it. However, I do miss Showtime, FOR WHICH I ALREADY PAY EXTRA. Given that I’m already paying for it, how can CBS justify blocking it?

Derek • on Aug 5, 2013 2:32 pm

Just because you’re paying TWC doesn’t mean TWC right now has a valid contract with CBS (the owner of Showtime).

ie. let’s say you’re paying $5.00/mo for Showtime, and up until the contract ran out, TWC was paying $4.00/Showtime-subscriber to CBS. But then the contract ran out.

Time Warner, since it figured it would settle the contract dispute, kept charging you for it.
CBS, figuring it would settle the dispute, kept letting TWC retransmit the content.

But eventually, push came to shove and CBS said “You don’t have a valid contract in place for CBS-TV, Showtime, et al, cease transmission immediately.”

So you should be due a full refund for the affected period of time from TWC.

Spud Hosnick • on Aug 5, 2013 2:32 pm

CBS did no such thing. TWC did all the blocking, and you should be talking to them.

Pete • on Aug 5, 2013 2:32 pm

CBS isn’t blocking Showtime. That was TWC’s decision.

Robert • on Aug 5, 2013 2:32 pm

CBS is the #1 most watched. If the top network cant haggle than who can? You might not care for the channel but the ratings say otherwise.

Richard Niederberg • on Aug 5, 2013 2:32 pm

Subscribers have been pushing for an A La Carte menu for years, so they wouldn’t be paying for programming that they don’t want or don’t watch. Let’s see how many subscribers the Golf Channel would have if people had to pay for it separately; there’s a philosophical, as well as a financial, element involved here. Be careful what you wish for or you might get it. Many people don’t like the tier system as is. Nice when you can call someone’s bluff.

Eva • on Aug 5, 2013 2:32 pm

I will choose to opt out of Time Warner. This is absurd.

Professor Falken • on Aug 5, 2013 2:32 pm

Ironic 2 BROKE GIRLS is on CBS….

marco • on Aug 5, 2013 2:32 pm

CBS pulling this stunt of revoking internet content to TWC broadband customers should be punished by the FCC. This sort of stunt should get CBS’s broadcast spectrum REVOKED!

Leslie+Glenny=MediaClusterMuck • on Aug 5, 2013 2:32 pm

Hear, hear, Marco! This “quid pro quo,” I’m-going-to-pull-my-networks (CBS’s internet properties and TWC’s yanking of CBS’s premium Showtime — could careless about the other CBS channels) is EMBLEMATIC of the SYSTEMIC and RAMPANT abuses of market-share and distribution systems by media titans like CBS and Time Warner — everything that consumer groups and other consumer advocates WARNED and PLEADED with the FCC and Congress as they RUBBER-STAMPED all of these post-Telecommunications Act of 1996 bill that was PAID FOR by the corporate media titans, of course.

The chickens have come to roost (is that the right cliched, mixed metaphor here?!) and CONSUMERS are PAYING for the inmates running the asylum! Greed and idiocy has taken over the corporate suites at CBS and Time Warner — about as sick a display to convince the FCC and Congress they created a regurgitated Frankenstein of epic proportions!

Hank • on Aug 5, 2013 2:32 pm

It is CBS’s content, they have the right to do whatever they want with it. If you disagree, then let us start making rules as to what you amy do with your home and other property.

Eff the FCC and your stupid idea.

BroadcastLicenseesMustObeyLAWS, Hank! • on Aug 5, 2013 2:32 pm

No offense, Hank, but your remark about the “eff the FCC” and letting CBS do “whatever they want with [their programming]” is just the kind of “endorsed deregulatory type of self-destructive insanity” that came from the Repugnant Party during and after the Reagan Administration years.

Sure, CBS can do “whatever they want with [their programming]” and pull it off both cable and other satellite/fiber-optic distribution systems if they want (and as far as I care!), but CBS — under the long-standing laws of being granted a digital BROADCAST LICENSE — is supposed to LIVE UP to their “PUBLIC SERVICE” requirements and if they can NOT do that, then they should also have their BROADCAST LICENSES REVOKED, yes, REVOKED, from the PUBLICLY-OWNED digital spectrum the broadcast networks and TV stations use for FREE!

Yes, CBS can try to get whatever it wants in under our federal government’s all too DEREGULATORY capitulation to BIG MEDIA MONOPOLISTS in being able to negotiate RETRANS FEES with distributors, but when they also PULL CBS’s Internet feeds from Time Warner Cable subscribers’ Internet access, is that NOT also considered PUNITIVE ACTION being taken against CONSUMERS??!!! These punitive actions against consumers by BOTH CBS and Time Warner Cable have gone TOO FAR and I’m sorry you don’t understand the language of the law when it comes to BROADCAST LICENSES and the REVIEW PROCESS by the FCC, because the PUBLIC has the right to call for their LICENSES to be REVOKED.

What’s sad is that the Far Right, deregulatory, monopoly-loving Republicans, and their all-too similarly bought-off Democrats, are the ones who legislated this DEREGULATORY/PRO-MEDIA-MERGER-CLUSTER-MUCK and the PUBLIC still has some RIGHTS in calling for these MEDIA PIGS to live up to their PUBLIC SERVICE and PUBLIC INTEREST OBLIGATIONS…or lose their licenses. The answer is NOT to DO NOTHING as you suggest, in due respect, Hank.

No Really • on Aug 5, 2013 2:32 pm

Wait a minute! Did the CEO of Time Warner Cable just acknowledge that he could charge customers on a a la carte basis for some channels? Is that only for broadcast channels, because for years we’ve been told that was “feasible” for a number of reasons.
Plus the call to unblock CBS.com content for TWC subs rings a little hollow given that TWC has always had a “walled garden” for its programming over the Internet.
This is a red herring move in a PR battle that CBS will return with some version of the argument that it provides its owned stations to viewers for free. It’s called “over the air” signal.
Maybe this standoff is the one that will truly redefine this never ending cycle of playing “chicken” with the consumer’s interests.

HAP • on Aug 5, 2013 2:32 pm

Obviously, CBS won’t go for this offer from TWC simply because htey would not want TWC subscribers to see an extra charge just for CBS and affiliates on their bills every month.

That said, the TWC offer looks to me like they may finally have opened the door a crack over consideration of a full ala carte system.

As for Showtime, it is being used as a negotiation tactic inasmuch as the premium channel has always cost extra. And I pay more for Showtime already than I do for HBO.

I do side with TWC and would like to note that they have made available the entire Starz package to Showtime subscribers at no cost. Perhaps an unexpected windfall for Starz when this kefuffle ends.

Insider • on Aug 5, 2013 2:32 pm

Interesting that I do not see how much TWC is willing to cut their subscription rate to subsidize ala carte for CBS, money they are paying now, but not under their new proposal.

Insider • on Aug 5, 2013 2:32 pm

How much is TWC planning to cut subs rates to subsidize sub payment of CBS? Given they will save over $1 in fees to CBS (Showtime even more) shouldn’t the customer get that rebated? Funny how I see no mention of that from. TWC.

Spud Hosnick • on Aug 5, 2013 2:32 pm

So, Ala Carte isn’t good for seldom-watched cable channels like ESPN, but it’s appropriate for highly-watched channels? Britt & crew didn’t think this one out; they have hurt their business model. Again. Cable viewers WANT the ability to block out non-broadcast channels.

Jeffry martini • on Aug 5, 2013 2:32 pm

Go ala carte…..cbs……if you do it…..everone else will have to follow suit. If you have a hd tv & hd antenna you can still watch cbs (and yes cbs sports) ….so no one will miss cbs nfl football…..!!!!